Impact Report 2019

2 | Gojo Impact Report 2019

The Managing Director of MIFIDA with customers at a center meeting in Yangon City. / Taejun Shin

Gojo Impact Report 2019 | 3

A Word From Our CEO
Dear readers,
It is my pleasure to issue our first impact report. Taking thisopportunity, let me briefly set forth why we founded Gojo and what
we aim to accomplish.
I was born and raised in Japan as a member of an ethnic minority.
This life has not been easy at times— it was not easy for my family
to afford my higher education by themselves, and even now I
don’t have a passport. However, I was fortunate, because I had
access to my parents’ love, basic education, information about theworld, and financial access— the major components of equality ofopportunity. One and a half years after joining Morgan Stanley, I
found that I could deal with the challenging working environment.
I started an NPO named Living in Peace with my friends, spending
our midnights, weekends, and vacations considering what we could
do to expand equality of opportunity. That’s how I encounteredmicrofinance. Living in Peace established the first microfinancefund in Japan’s history in 2009, and became one of the mostsuccessful NPOs in Japan.
When I attended the Summer Davos in 2012, I realized that
individuals can make private sector versions of internationalorganizations in the 21st century. I became determined to establish
the Private Sector World Bank, extending financial inclusion to
everyone in the world. Although microfinance is not a silver bullet,
it can go a long way toward improving equality of opportunity. We
therefore founded Gojo in July 2014.

4 | Gojo Impact Report 2019

The job of financial services is to provide people with useful tools
to manage their money. However, the microfinance sector is still
struggling to provide useful, high-quality services at affordable
prices. As business people, our approach to this problem is toequip financial service providers with operational excellence andtechnology, and enable them to scale.
We prioritized achieving operational excellence and scaling forthe first 5 years, because technology is an amplifier— efficient
operations become more efficient thanks to technology, butinefficient operations only become more inefficient. Startingin 2019, we embarked on several new tech initiatives to further
improve the quality of our services and operations.
Impact is not at all on the periphery of our business. It is right in thecenter of everything we do. If we want to be a truly excellent, clientcentric financial service provider, we have to measure the impactof our services in an intellectually honest manner and face reality
to improve what we do. Adherence to the truth, or intellectualhonesty, is what is needed in our business, rather than any wishful
thinking. That is the spirit of our impact measurement.
I hope you enjoy our impact report. We welcome any constructive
criticism or feedback.
Best wishes,
TaejunCEO and co-founder

Gojo Impact Report 2019 | 5

A word from JICA
Japan International Cooperation Agency (JICA) places great emphasis on
financial inclusion, an endeavor to provide universal access to affordable
financial products and services. Access to financial services is importantfor individuals in the developing world, as well, to lead a stable life andadvance their economic activities. In particular, providing financial accessto the underprivileged segment of population in emerging economies,
which often includes women, ethnic minorities and persons withdisabilities, is crucial to ensure that no one is left behind from financial
inclusion.
In our position paper on the SDGs published in 2017, we declare our aim
to achieve Goal 1:“No poverty” through facilitating financial inclusion
in developing countries, strengthening coordination toward poverty
eradication in our operations, and promoting innovative solutions incollaboration with various stakeholders, including private actors.
JICA also participates in the initiative of “2X Challenge: Financing for
Women” with the other G7 development partners which aims to empower
women through mobilizing private investment in their entrepreneurial andeconomic activities.
Gojo promotes financial access for all, with the primary goal of reaching
100 million people in all continents by the end of 2030. Considering that the
majority of clients in the microfinance institutions to which Gojo provides
financial and technical resources are women, we expect Gojo’s work togreatly advance the financial access and economic activities of women indeveloping economies, as well as their underserved populations as a whole.
We highly appreciate Gojo’s mission of creating a world where everyone
has the opportunity to determine his or her own destiny and attain a better
life. We are pleased to be of any assistance for Gojo to make a difference topeople’s lives in the developing world.

Mikio Hataeda
Director General,
Private Sector Partnership and Finance Department
6 | Gojo Impact Report 2019

A Cambodian lady who now runs a weaving factory with several employees. / Taejun Shin

Gojo Impact Report 2019 | 7

The team at our Gojo members’ meeting in November 2019. / Gojo

Our Vision,
Mission and Values
Our vision
To create a world where everyone can determine their own destiny
Our mission
To extend financial inclusion to everyone
2030 Goal
To enable provision of high-quality financial services to more than
100 million unserved and underserved people in 50+ countries.

8 | Gojo Impact Report 2019

Gojo values
Our name, “Gojo” (五常), comes from the 5 Confucian values ofcompassion, integrity, courtesy, wisdom, and trust. We use amodern interpretation of the values to guide our decisions and dayto-day work.

Stand by our Clients
We strive to see things from the perspective of our end clients sothat our services support their goals.

Act on Principles
We are guided in all we do by our principles
without exception.

Listen FirstWe always keep an open mind and upholdeveryone’s right to be heard and respected.

Learn–Think–Share
We challenge the conventional, consider thepractical, and share our knowledge with others.

Be Genuine
We build trust and demonstrate our loyalty bytelling the truth without concern for appearances.

Gojo Impact Report 2019 | 9Ladies in Gujarat, India. They are all neighbors and formed a group to borrow money from an MFI backed by Ananya. / Taejun Shin

10 | Gojo Impact Report 2019

The challenge offinancial inclusion
According to the 2017 Global Findex, around 1.7 billion people today
do not have access to financial services. Nearly all of them live indeveloping countries, and a disproportionate number (56%) are
women. This lack of access to financial services is a key factor thatperpetuates poverty. People who are unbanked or underbanked
lack safe ways to save money, have to spend time physically moving
money to and fro when they make or receive payments, and find
it difficult to obtain loans to fund their businesses or to pay forimportant purchases.

Table 1 - The unbanked population in our countries of operation

Country

Unbanked
Adult Population

Unbanked
Adult Population (%)

India

190 million

20%

Myanmar27 million

74%

Cambodia

8 million

78%

Sri Lanka

4 million

26%

Note: Financial exclusion data from the 2017 Global Findex;
population data based on the World Bank’s 2017 population estimates

Gojo Impact Report 2019 | 11

Our commitment
to the SDGs
As a business whose core mission is to enable people inpoverty to overcome barriers to building better futures,
Gojo is committed to Goal 1: End poverty in all its forms
everywhere, Goal 8: Decent work and economic growth and
Goal 10: Reduced inequality.
Recognising the complex and multidimensional nature ofpoverty, our work also focuses directly and indirectly onother SDGs in the areas of women’s empowerment, healthand wellbeing, education, water and sanitation, and energy.
For instance, AVIOM puts decent, affordable housing withinreach of over 10,000 households, while Satya and Maxima
provide loans for sanitation and energy. Ananya’s wideranging footprint as a microfinance wholesaler enables theprovision of loans and services for agriculture, skills training,
healthcare, energy and sanitation to over 4.7 million end
clients, 99% of whom are women.
Gojo embraces the historical legacy of microfinanceinstitutions as champions of women’s empowerment andgender equality, and the majority of our group companies
have a particular focus on women borrowers andentrepreneurs.

12 | Gojo Impact Report 2019

As an investor, we align our KPIs with the SDGs and the IRIS1
indicators, which enable us to communicate our reach in an easily
comparable manner. The strong growth in our end client numbers
from 2018 to 2019 and the continuing predominance of womenclients in our loan portfolio are encouraging indications that we aremaking progress towards our 2030 goal while continuing to reachunderserved groups.
At the same time, as an operator, we continually seek to improve
our practice of financial inclusion. In 2020, therefore, we look to go
beyond high-level KPIs and will be developing approaches to impact
measurement that provide shorter feedback loops and give us
deeper insight into our clients’ experience of our partners’ products
and services.
1. The Impact Reporting and Investment Standards (IRIS) are a standardised set of indicatorsdeveloped by the Global Impact Investing Network (GIIN) to enable investors and companies tomeasure and manage their impact

Table 2 - Contributions towards SDG targets
SDG targets

KPIs

March 2019

March 2020

1.2
By 2030, reduce the number ofpeople living in poverty at leastby half

Total number ofactive clients1

340,562

558,783% of rural clients2

87.00%

87.22%

Rural clients % ofloan portfolio3

64.04%

74.65%% of female clients4

99.73%

98.54%

Number of SME clients

N/A5

15,4036

10.2
By 2030, empower and promote
the social, economic and political inclusion of all
5aGive women equal rights to economic resources
8.3
Encourage the formalisationand growth of MSMEs, including through access to financial
services

1. Excluding Ananya’s end clients (Ananya is a microfinance wholesaler with 4.5 million end clients)
2. The March 2019 numbers exclude Ananya, Loan Frame and two companies who did not report on rural client numbers at the time;
the March 2020 numbers exclude Ananya, Loan Frame and one other group company not reporting on rural clients
3. As Above
4. Excluding Ananya and Loan Frame
5. We began collecting this data in March 2020
6. Excluding Ananya’s end SME clients, AVIOM, who only lend to individuals, and one other company that does not currently report
SME client numbers

Gojo Impact Report 2019 | 13

Our approach tocreating impact

Figure 1 - How Gojo Creates Impact

Gojo’s business is to provide our partners with the key skills andresources needed to deliver impact at scale. We do this in thefollowing ways:

1. Partner selection
We select and invest in partners who demonstrate alignment with
our mission and values through their focus on extending financial
inclusion to unserved and underserved households and businesses.
Partners are chosen for their potential to become market leaders
in countries with large low-income populations, so that eachpartnership enables financial inclusion for as many people aspossible. We also seek out partners with strengths in technology or
specific financial inclusion outcomes to complement and build up
the group as a whole.

14 | Gojo Impact Report 2019

2. Technical and management support
Gojo’s team is made up of professionals experienced in
microfinance, investment, consulting, technology, and impact
management. Where helpful, we share our knowledge andexperience with partners to strengthen governance and support
new initiatives, for instance by providing training in internal audit,
helping to design or procure technology products, or through ourcountry representatives working alongside partners in their local
offices.

3. Social Performance Management (SPM)
From the beginning, Gojo has had a firm commitment to industry
standards for responsible practice, as set out in the Client
Protection Principles (CPP 1 ) and Universal Standards for Social
Performance Management (USSPM2 ). Our SPM lead, Praachi
Gandhi, is an SPI4 Qualified Auditor. Praachi works closely witheach of our partner companies to conduct SPI4 assessments,
achieve Smart Certification and build capacity for monitoring andcompliance with the Universal Standards.

4. Impact measurement
Our work on impact measurement began in earnest in early 2020,
and is therefore still in its early stages. While we continue tomonitor a standardised set of IRIS-aligned KPIs for each partner,
we define impact as the change that occurs in our clients’ lives as aresult of our services. Our emphasis is therefore shifting away from
outputs and towards data that will tell us how our clients’ lives arechanging in response to current events and our partners’ services.

1. The Client Protection Principles were developed by the Smart Campaign and are theminimum standards of care that clients should expect to receive when doing business with afinancial service provider.
2. The Universal Standards for Social Performance Management, promoted by the Social
Performance Task Force (SPTF), are a comprehensive manual of best practices in microfinancecreated to help financial service providers achieve their social goals.

Gojo Impact Report 2019 | 15

How we build
partnerships for impact
Gojo partners share a common ambition to advance financial
inclusion to all unserved and underserved communities andbusinesses.
During our due diligence process, we assess prospective
partners’ performance on and commitment to their social goals
and responsible lending practices. We also place emphasis oncommercially viable, scalable business models as we believe thesewill ultimately lead to sustainable impact for the greatest numberof people. We conduct a detailed review of operations, in-depth
conversations with the management team, and field visits tounderstand how each company’s policies and social goals translate
into practice.
To ensure ongoing accountability to social goals, we requirepartners to carry out regular SPI4 assessments to measurecompliance with the USSPM and CPP, report monthly and quarterly
on social performance, and seek Smart Certification within the firstfew years of joining Gojo.
Through equity investments, we demonstrate our support forpartners’ visions and our long-term commitment to each partner.
By taking a majority stake in partner companies, we create stability
and unity of purpose at board level, enabling management teams topursue their goals over the long term.

16 | Gojo Impact Report 2019

Employees of MIFIDA. The picture was taken after completing a 2-hour training session. / Taejun Shin

Gojo Impact Report 2019 | 17

Gojo group overview
2014

August 2014

Maxima MicrofinanceMaxima’s mission is to provide inclusive financial solutions to low income
households and SMEs in Cambodia to improve their socio-economic standards in asustainable way. Maxima lends primarily to rural poor and low-income individuals
and SMEs.

2015
February 2015

Sejaya Microcredit
Together with Renuka Rathnahewage, a respected microfinance practitioner, weestablished Sejaya Microcredit to provide inclusive financial services to uplift andempower underprivileged men and women in Sri Lanka. Sejaya primarily provides
income-generating loans to women clients, and trains clients in financial literacy
and enterprise management.

2016
August 2015

Microfinance Delta International (MIFIDA)
Gojo entered into a joint venture with U Myint Swe, one of Myanmar’s best known
and most respected microfinance practitioners, to establish MIFIDA. MIFIDA aims
to provide all low-income people in Myanmar with the opportunity to achieve a life
free from poverty, with dignity and purpose. MIFIDA provides micro-enterprise,
education, and emergency loans as well as voluntary savings for clients.

201718 | Gojo Impact Report 2019

February 2018

Ananya Finance for Inclusive GrowthAnanya is a wholesale lender for MFIs and other social enterprises in India.
Established in 2009 by Friends of Women’s World Banking (FWWB), Ananya’s vision
is to enable every poor Indian woman to have access to financial capital and enable
her to be an active catalyst in social development. Ananya provides finance andcapacity-building support to MFIs, agrifinance providers and other MSMEs, and has
over 4.7 million end clients.

July 20182018

Satya Microcapital
Satya is the fastest growing MFI in India, setting up over 80 branches in just 2
years since establishment. Satya aims to be the preferred choice for people at thebottom of the pyramid in creating their enterprises and livelihoods. Satya provides
group and individual loans, as well as loans for water, sanitation and hygiene(WASH) and energy, and is pioneering cashless collections through biometricauthentication.

August 2019

AVIOM India Housing Finance
2019

AVIOM’s mission is to help families in semi-urban areas realise their dream ofowning a home. In addition to affordable home loans, AVIOM also provides financefor home upgrades and sanitation. AVIOM is a woman-led company that empowers
women clients by placing them at the center of their household’s goals for homeownership and financial autonomy.

December 2019

Loan Frame Technologies

2020

Loan Frame is a supply chain finance platform serving the ‘missing middle’ byaiming to build the largest SME lending marketplace in India. Loan Frame uses
proprietary scoring and risk assessment algorithms that process both traditional
and alternative data to assess borrower creditworthiness, and has automated all
major workflows to enable same day loan disbursals.

Gojo Impact Report 2019 | 19

Pioneering small digitalloans in rural Cambodia
Together with Maxima, we are developing a new financial service
for rural underserved clients in Cambodia.
In 2017, the National Bank of Cambodia introduced an 18% interest
cap for MFIs. In response, many MFIs increased their average loan
size to maintain profitability. We saw the growth of large-sizedloans backed by collateral. Many companies began withdrawing
their operations from rural areas due to their reduced profitability.
We realised that this meant that smaller loans in rural areas werein short supply. Small loan products are extremely challenging
for traditional branch-based businesses because of their highoperational costs.
We saw an opportunity here to introduce digitally-enabled lending
to fill this gap. Through our automated scoring-based assessment
and transactions facilitated by partnerships with electronic
payments service providers, we are delivering financial services toclients that other microfinance operators struggle to serve.
Combining Maxima’s strong reputation as a respected institution
and Gojo’s technical expertise, we are able to provide a stable,
reliable platform which can be used over and over again by ruralclients. By giving clients convenient access to cash when they needit, we reduce the need for clients to sell their assets at short notice
to obtain lump sums of cash, and thus enable them to build theirasset base over time. Our service will enable the financing of daily
cash needs, working capital needs, and emergency needs that arise
for almost all of our clients at some point in their lives.

20 | Gojo Impact Report 2019

Sunset while conducting field research in Rural areas of Banteay Meas, 3 hours south of Phnom Penh. / Koh Terai

We recently completed our first pilot
In our first pilot, we gathered over 50 members in one semi-ruralvillage near Phnom Penh. We conducted in-depth research tounderstand our clients’ needs and experience of the service, as
well as how we could further improve on the service. Through our
research, we discovered strong demand from the people in our
initial pilot area to fund their silk weaving business through smallloans, which was different from our original expectation that ourclients wanted small loans for daily consumption. This encouraged
us to expand our product offering beyond just daily consumptionloans and to consider other use cases.
The project is now in its second phase, where we are refining ourservice for scalability with stability. We will soon be introducing
our service to several new villages with different types of clients,
where we will continue iterating the service to meet our clients’needs as best we can.
Gojo Impact Report 2019 | 21

Sok Kosal, the project manager, says, “It is my passion to learn
new things, and when Tomo [Gojo’s Country Representative inCambodia] introduced this project to me, I was excited to work
together with a team from Japan. I used to be a Regional Manager at
Maxima, and I would work with Credit Officers, who have the same
experience as me in the field. When I moved to the digital project,
the team members were from different fields and different nations,so sometimes to communicate well, we needed to take the time tounderstand each other first. I realised from working with the digitalteam for just 6 or so months, I have developed myself a lot.
“Even though I experienced lots of challenges, I have a lot of
support from the Gojo team. Marco [product management at Gojo]
gives me a lot of guidance for good management, Koh [Gojo’s
product designer] always has creative ideas, and Tomo has given
me strong support in every aspect.
“Once, Tomasz [data analytics at Gojo] recommended giving more
incentives to the M-Lady [the agent marketing loans to clients],
and after we proposed it to the senior management team andthey approved it, the M-Lady was very happy and her productivity
increased. This is one way the team’s combined effort helped me to
manage the project better and produce a good result.”
This project has enabled us to continue pursuing Maxima’s mission
to “provide inclusive finance to poor people to improve their socioeconomic living standards” to new heights. We hope to empower
clients to build their wealth and prevent them from needing toliquidate their precious assets just to obtain cash.

22 | Gojo Impact Report 2019

Stories from the field
The following stories from Myanmar, Sri Lanka and India illustrate how ourclients are making use of our partners’ services to achieve their goals.

Gojo Impact Report 2019 | 23

Inspiration for entrepreneurship
Padukka, Sri Lanka
Rohini Welikala is a client of Sejaya, our partner in Sri Lanka. She
owned a small grocery shop at her house and would typically use
loans from several MFIs to supplement her income for consumption
and daily expenses.
When Rohini heard about Sejaya, she became inspired to use
loans to grow her business. In 2016, she took a loan from Sejaya topurchase sewing machines, and started a business making skirts
and blouses as a subcontractor for a garment manufacturer. In theyears since, micro-credit has enabled Rohini to expand both her
garment and grocery businesses by hiring 5 people for her sewing
business and moving her grocery business out of her house andinto a small shop.
The increase in income has enabled Rohini to upgrade her houseand pay for one son’s continuing education and another son’s
marriage, and her employees have been able to send their children
for extra classes as a result of the income from their jobs. Rohini
now hopes to continue expanding her businesses and to eventually
pass them on to her son.

Rohini and her employees at work
/ Sejaya

24 | Gojo Impact Report 2019

Providing rice for the community
Minhla Township, Myanmar
Daw Nyo Nyo San is 33 years old and lives with her husband and twochildren in Minhla Township in Myanmar. She used to sell vegetablesfrom her bicycle, and hoped to open a small grocery shop one day.
But having the funds to set up a shop seemed like a distant dream—
her income was barely enough to cover daily necessities, and she
was unable to pay for her daughter’s school fees.
She heard about MIFIDA’s loans for low-income families andrealised she could get a loan despite her variable income. Afterattending a training session from MIFIDA, she obtained a loan of
200,000 kyats and used it to build a grocery shop, and stocked the
shelves with snacks, vegetables and cooking supplies. As her shop
gained popularity, she expanded her inventory over subsequentloan cycles to include cosmetics, shoes, betel, petrol, rice andphone cards.
Daw Nyo Nyo San’s increased income has enabled her to begin
spending more on food and her children’s education, with money
left over for reinvesting in the business. She has also begun saving
2000 kyats a day. Whereas previously she worried about nothaving enough money for rice, she now takes pride in selling ricewith a monthly repayment scheme, ensuring that families in her
community do not go hungry. She looks forward to expanding her
inventory further and hopes to send her children to university.
Daw Nyo Nyo San sits surrounded bygoods in her shop. / MIFIDA

Gojo Impact Report 2019 | 25

A fresh start at 55
Patna, Bihar, India
Rita Devi is 55, and lives with Sohan, her husband of more than
30 years, in Patna, Bihar, India. Although the couple dreamt ofowning and managing a business, they struggled even to cover daily
expenses from time to time and felt helpless that they were often
forced to rely on money from their sons.
Upon hearing of their difficulties, a friend told them about how
Satya’s microloans had helped her set up a dairy business, andencouraged Rita to join one of Satya’s Limited Liability Groups. In
2017, Rita Devi applied for a loan of Rs. 35,000 and set up a small
general store together with Sohan. The enterprising pair would
constantly adjust their inventory and processes to make their shop
more and more popular. The business prospered under their carefulmanagement, and recently Rita Devi was able to secure a MicroBusiness Loan from Satya of Rs. 150,000 to expand the businessacross two stores.
Rita Devi says, “At this age when everyone expects older people
to just sit at home, we are glad that we didn’t give up. We had adream and started working towards achieving the same...I want toheartily thank the entire team of Satya for helping poor people likeus, even at this age, reach places which would otherwise have been
impossible to even dream of.”
Rita Devi with her husband,
Sohan Prasad, at their shop
in Patna./ Satya

26 | Gojo Impact Report 2019

Skills training for a steady income
Bhavra, Madhya Pradesh, India
Shabnam Sehzad Khan lives in Bhavra, Madhya Pradesh, India. She
had a little bit of tailoring knowledge and used to do odd jobs here
and there, stitching and sewing things. She wanted to improve her
tailoring skills, and when she heard about the entrepreneurshiptraining provided by Ananya through her local MFI, she eagerly
enrolled.
On the training course, she learnt about cutting, stitching, inserting
sleeves, seam techniques and fashionable new clothing designs.
Feeling confident about her new skills, she decided to take theplunge and used a Rs. 30,000 loan from Ananya (provided throughPrayas, a local MFI) to buy a sewing machine. She began creating
garments such as churidar, patiyala, ghagra, and lehenga, andbegan to sell clothes directly to local women on top of her existing
sewing jobs. Her workload increased over time, and she was able toemploy two local girls to assist her.
Shabnam says, “I am thankful for such an initiative that not only
thinks of building capacity for beneficiaries but also provides loan
support. After joining this project, I have been sewing new designs
and providing more services to customers, which has increased myearnings.”
Shabnam sits at her workbench withher sewing machine, purchased using aloan from Ananya through a local MFI/ AnanyaGojo Impact Report 2019 | 27

An interview with
Stuart Rutherford
Could you tell me how you first became interested in Gojo?

I met Taejun Shin about ten years ago at a microfinance event.
We kept in touch and he told me about his ideas for Gojo. I
thought his combination of business success, commitment tosocial development, and openness to new ideas would be a goodfoundation for a new type of microfinance investment company.
Why is it important for microfinance practitioners to invest inunderstanding their clients, and how can we do this well?
Microfinance folk often feel they are bringing something entirely
new to low-income households. They tend to overlook the long
history of money management practices developed by poor people.
I saw examples of these practices in the slums of Latin America inthe early 1970s, before microfinance got going. Once microfinance
was up and running, I saw a gap between what MFIs were doing andwhat their clients had long been doing for themselves.
The gap occurred, I think, because the microfinance pioneers
lacked knowledge about poor people’s financial behaviour. A
good example is savings. Even Muhammad Yunus, the founder ofGrameen Bank, could tell an international conference as late as
1996 that “the poor don’t need savings: the only thing that can help
them is loans”. This puzzled me, because I had seen many inventive
savings schemes run by poor communities all around the world, andseen how committed their members were to their savings.
Some years later, after some painful learning from their own
clients, Yunus and Grameen changed their minds. Grameen Bank is
now very good at helping poor people amass, store, and use theirsavings. As a Grameen client said to me at the time, “Ah! Grameen
should have done this years ago!”
28 | Gojo Impact Report 2019

Stuart is a pioneering researcher in thefield of microfinance, as well as one of
Gojo’s board members. He has over 35
years’ experience in financial services
for the poor, and is the author of The
Poor and their Money (2000) and coauthor of Portfolios of the Poor (2009).

Investing in understanding clients will help us avoid such mistakes.
We’ll have to use research methods that take us close to therealities of life on low incomes, as it is lived, day-in and day-out. My
own favourite method is ‘financial diaries’, where volunteer lowincome households invite us to track their finances, revealing therelationship between their money and their lives.
What do you think Gojo is doing well in terms of our impact so far?

Gojo is at the beginning of what will turn out to be a trail-blazing
experiment in impact research, so it doesn’t yet have much finegrain impact data of its own.
It is likely that the impact of Gojo’s investments in group-based
lending in Sri Lanka, group-based lending and saving in Myanmar,
and in enterprise lending in Cambodia, is similar to what the mostrecent reliable international research shows: microlending has
a positive impact on enterprise growth and stability, and savings
have wide-ranging impacts on household security for lower-income
households, many of whom don’t run enterprises but work in theinformal labour market. The focus on women clients has mixed
outcomes but generally favours women’s interests. In India, Gojo’s
partners are each driving forward improved or even entirely new
ways of doing microfinance, and figuring out what this means forclients will be an exciting part of Gojo’s impact evaluation work.
What do you feel are the key growth areas for Gojo in the next 5
years?
Two areas of Gojo’s growth especially excite me. One is its evolving
commitment to ‘people-based product design’, especially in savings
and in ‘hybrid’ products – products that are not satisfied with theconventional silos into which financial services are divided, but see
low-income money-management needs more holistically. The otheris its commitment to using technology – not for its own sake but tomake its products ever more accessible, useful, and affordable.

Gojo Impact Report 2019 | 29

Social Performance
Management (SPM)
at Gojo
Since inception, one of Gojo’s guiding principles has been to act
with integrity as a responsible social investor. We set up our SPM
department in December 2014 to ensure accountability to Gojo’s
values and social mission as well as compliance with industrystandard best practices across all partners.
SPM is a social audit and monitoring function that focuses on how
a financial service provider’s management systems, processes
and products translate its social mission into practice. We use
CERISE’s1 SPI4 audit tool, which encompasses the ALINUS due
diligence indicators and the Client Protection Principles, toenable the partners to evaluate their alignment with the Universal
Standards for Social Performance Management (USSPM) andthe Client Protection Principles (CPP). Because the SPI4 Audit
tool is fully aligned with the USSPM, it provides a comprehensive
assessment of an institution’s SPM practices, supporting
responsible MFIs to implement best practices for their staff,
clients, and the environment.

1. CERISE is a French non-profit organisation dedicated to responsible and ethical finance.
They have pioneered the standardisation of SPM implementation and developed and maintainthe SPI4 audit tool.

30 | Gojo Impact Report 2019

Maxima employees and board members at its 2017 annual party. / Taejun Shin

Gojo Impact Report 2019 | 31

Figure 2 - SPM Journey with our Partners
To institutionalise SPM after the initial investment, we begin
developing buy-in at the level of our partners’ board and senior
management, working with the management team to set up aninternal SPM Department and appoint a Head of SPM. We provide
training on Gojo’s mission and vision, as well as SPM and the CPP, tostaff at all levels of our partners’ organisations, from the board totheir branches.
Within the first 12 months of the investment, we conduct or
ask partners to conduct a CPP self-assessment. We also assist
partners to conduct SPI4 Audits, working closely with partners’ SPM
committees and CERISE to develop their social goals and social
reporting dashboards, and to establish their alignment with the SDGs.
32 | Gojo Impact Report 2019

Following each CPP self-assessment and SPI4 audit, Gojo works withpartners to prepare an action plan highlighting any gaps in compliancewith the principles and standards. We support partners to implement
the actions identified, embedding CPP and the USSPM into everyday
operations. Through discussions with partners’ SPM committees,
we work to refine their Codes of Conduct, Complaints Redressal
processes, Privacy Policies and other key processes and systems. Onceeach partner is ready, they apply for Smart Certification.
Experience teaches us that there is no ‘one size fits all’ method for
doing SPM, as each partner has its own strengths and challenges.
Nonetheless, recommending the following best practices at all partners
has helped us deliver better results and avoid some common risks:

Table 3 - Common Risks
Common risks

Potential causes

Relevant best practices from SPM framework• Non-compliance with CPP 2:
Prevention of over-indebtedness• Inappropriate product/service• Irresponsible pricing• Lack of transparency• Regularly generate granular PAR
reports• Improve client repayment capacity
evaluations• Delinquent clients analysis• Review the fit of loan products with
the needs of clients

Client exit

• Inappropriate product design• Disrespectful/aggressive
behaviour• Client Satisfaction Survey• Client Complaints Mechanism• Client Exit Surveys

High staff turnover• No formal HR policy explaining
the rights of employees• No employee grievancemechanism• Poor health and safety risk
mitigation processes

High delinquency
rates

Reputational risk
due to unethicalpractices• Breach of privacy protection• Coercive collection practices• Conduct exit interviews with staff• Ensure staff motivational activities
and training are as per needs
assessment• Ensure compliance with local law andtransparency of salary scales• Follow privacy procedures• Ensure clients give full permission for
the use of their data
• Regularly check that there is nopractice of aggressive disbursals andcollections

Gojo Impact Report 2019 | 33

Our SPM
Achievements so far

Figure 3 - Our SPM Achievements with our partners“I know this certification comes on the cusp of a lot of effort by
Maxima Microfinance Plc, from the executive to the loan officer
level. It is, indeed, very well deserved. Once again, congratulations,and thank you for your commitment to your clients and to advancing
client protection around the world.”— Isabelle Barres,
Director of the Smart Campaign, on Maxima’s Smart Certification

34 | Gojo Impact Report 2019

Other SPM activities
While Smart Certification and SPI4 audits are importantmilestones, SPM at Gojo is ultimately about the ongoing, day-today work of internalising best practices to become an increasingly
socially responsible, client-centered group of organisations. In
addition to providing regular training on CPP and the USSPM forbranch managers and loan officers, our partners have continuously
worked to update and improve their processes, participate actively
in the sector, and deliver services that add value to clients’ lives.

Refining complaints procedures
In 2016 and 2017, Maxima and MIFIDA formalized their Complaint
Resolution Mechanisms and Codes of Conduct. Maxima worked
to ensure that clients were informed about their rights to makecomplaints and provide feedback, and consequently began toreceive suggestions and complaints from their clients. This enabled
Maxima to begin responding to and resolving complaints, yielding
positive results in their Customer Satisfaction Survey the following
year.
In early 2020, Satya also began to refine their Clients’ Grievance
Redressal Mechanism as part of their increased focus on SPM. In
addition, they established an Employee Redressal Cell for internal
complaints, and a Grievance Redressal Cell specifically for womenclients.

Gojo Impact Report 2019 | 35

Contributing to sectoral knowledge and partnerships
In 2017, Maxima was one of 5 Cambodian MFIs to participate in the
MIX Voice of Client Cambodia chapter, and Gojo SPM lead alongwith MAXIMA SPM Dept worked with the MIX team during thedevelopment of the field survey. The findings helped Maxima tofurther understand clients’ experiences and how to better respondto complaints.
In 2019, Gojo held a session on SPM for Ananya’s 50+ MFI partners,
serving over 4 million end clients in total.
In 2020, we were proud to support CERISE’s development of the
SPI4 Online Platform, making it easier for international teams tocollaborate on and access SPI4 audits.

Training and equipping clients
Our partners’ missions focus on empowering low-income people
to lift themselves out of poverty and successfully manage theirmoney. Many have developed skills training courses alongside theirusual services to help clients to make the most of microloans.
In 2016, Myanmar was a nascent market where low-income
communities had little prior experience with financial services.
In the absence of a Credit Bureau, MIFIDA was concerned thatclients might be vulnerable to over-indebtedness, and decided tohold a Center Chiefs Workshop for leaders of joint liability groups.
During the workshop, over 300 Center Chiefs presented roleplays demonstrating their understanding of financial literacy toindustry members and officials, including representatives from the
Myanmar Financial Regulatory Department. MIFIDA became one of
the first MFIs in Myanmar to provide financial literacy training fortheir clients.
Sejaya and Ananya have a strong focus on women’s empowerment,
and both take a hands-on approach to equipping their end clients36 | Gojo Impact Report 2019

with useful skills. Since 2016, Sejaya has been providing ‘credit plus’
services to its women clients and their communities, such as ahealth and malnourishment program, cancer detection workshops,
home gardening projects and training for enterprise development.
In addition, in 2018, Sejaya began to recruit and train daughters ofcenter leaders as paid volunteers to support Finance Assistants at
branches, with the opportunity to be employed by Sejaya or anotherorganisation after their first year’s performance evaluation.
Similarly, Ananya has been running a Skill and Enterprise
Development Program (SEDP) since 2019 with the support of the
Small Industries Development Bank of India (SIDBI) and the UK
government’s Department for International Development (DFID),
aiming to provide entrepreneurship training and starter loans to
7,000 women.

Adding value to clients’ lives, communities, and the environment
As socially responsible organisations, Gojo’s partners have also
worked to benefit their employees and communities in ways that go
beyond their mission.
Maxima, for instance, has demonstrated their commitment
to sanitation and the environment through various initiatives,
including their 2015-16 Cleanliness and Health Promotion
Project, where it provided handwashing workshops for clients’children; a tree planting campaign ‘Each One Plant On’ in 2016;
and their decision to go entirely plastic-free at their Phnom Penh
“The biggest value-add is that at Gojo
partners, the teams have intensified
their commitment and dedication to
SPM through the process of building
trust with me. Even though Gojo fully
supports all partners, ultimately it is
the fabulous teams at Gojo’s partners
that ‘make it happen’! SPM means doing
smart business from your heart. You
can never go wrong! Microfinance isfirst and foremost about loving thepeople we serve.”

headquarters in 2018.
As of early 2020, Satya, Ananya and AVIOM are all involved in helping
to meet basic needs of clients and communities affected by the
Covid-19 crisis. Satya launched a Toll Free Medical Helpline forclients, staff and their families, and the three companies have been
helping to distribute essential items such as food, medicine, andwater to clients, migrant workers, senior citizens, widows, poor
farmers and sanitation workers.

- Praachi Gandhi,
Gojo’s SPM lead

Gojo Impact Report 2019 | 37

Our SPI4 Benchmarks
In addition to developing and maintaining the SPI4 tool, CERISE
also gathers SPI4 audit data from users. They use this to produce
average scores from all quality audits, enabling financial service
providers to compare their social performance with that of peers.
SPI4 audits have been completed so far in two of our seven partnercompanies, Maxima and Satya. We have used CERISE’s March
2020 benchmarks to compare their results against those of otherfinancial service providers.
Maxima and Satya’s average scores outperformed those of all SPI4
audited organisations, as well as those of regional and for-profit
peer groups, across all six dimensions of SPM. Maxima and Satyaperformed particularly well in Dimension 1: Define and monitor
social goals, Dimension 3: Design products that meet clients’needs, and Dimension 4: Treat clients responsibly, demonstrating
both companies’ ongoing commitment to delivering client-centred,
useful services.
Maxima and Satya’s average scores slightly underperformed
benchmarks by 6 points on one sub-element, 6D: Compensation.

Figure 4 - Social performancecompared to other for-profit financial
service providers

We take the need to ensure that compensation is in line with oursocial goals and mission seriously, and have incorporated thiselement, along with other key areas for improvement, into ouraction plans following the SPI4 audits.

Figure 5 - Social performancecompared to a regional peer group(South and Southeast Asia)
38 | Gojo Impact Report 2019

Table 4 - SPI4 Scores (March 2020)
Difference
between the
average of all
audits* andthe Gojo SPI4scoresAverage score of
all quality audits
from SPI4 CERISE
database (N=378)

Average score
for Maxima andSatya

Dim 1 Define and monitor social goals

60

82

22

1A - Social strategy

70

78

8

1B - Reporting of client-level data

51

86

35

Dim 2 Commitment to social goals

50

58

8

2A - Board accountability

45

54

9

2B - Senior management accountability

46

62

16

2C - Staff accountability

59

60

1

Dim 3 Design products that meet clients' needs

62

90

28

3A - Client needs and preferences

53

86

33

3B - Benefits to clients

70

93

23

Dim 4 Treat clients responsibly

70

99

29

4A - Prevention of over-indebtedness

76

100

24

4B - Transparency

76

98

22

4C - Fair and respectful treatment of clients

72

100

28

4D - Privacy of client data

68

100

32

4E - Mechanisms for complaint resolution

57

97

40

Dim 5 Treat employees responsibly

68

86

18

5A - HR policy

67

86

19

5B - Communication of terms of employment

76

93

17

5C - Employee satisfaction

60

79

19

Dim 6 Balance financial and social performance

71

80

9

6A - Growth rates

73

91

17

6B - Alignment of objectives

74

78

4

6C - Responsible pricing

80

100

20

6D - Compensation

56

50

-6

Total score

63

82

19

Universal Standards of SPM

Gojo Impact Report 2019 | 39

Conclusion:
2020 and beyond
Gojo has come a long way over the past 5 years, from a small
startup with a few thousand end clients in 2014 to a diverse groupof financial service providers with over 500,000 end clients. As westart to achieve a certain scale, we know our journey to deliver thebest possible quality of service for the greatest possible number ofclients is still just beginning.
What this means for us in 2020 and beyond is strengthening
our work on impact – building field-level feedback loops into
our decision-making and product development, and designinginnovative services that put the needs of low-income families andbusinesses front and center.
Some of the changes needed are basic: we are building a unified
data platform that will enable us to better assess our SDGs
footprint, identify gaps in outreach, and spot opportunities for
growth across all our countries of operation. In addition, we aim
to introduce new standardised measures across the group thatwill keep us accountable for progress towards our 2030 goal ofreaching over 100 million people across 50 countries or more.

40 | Gojo Impact Report 2019

Group loan customers in Cambodia being served by a Maxima loan officer.
3% of the population are Muslim, who live peacefully in a Buddhist majority nation.
/ Taejun Shin

Other initiatives for impact measurement will help us go beyond
simply collecting data on high-level outputs to achieve a truly
deep understanding of our clients’ lives and outcomes. Long-term
financial diaries projects will give us detailed weekly data on ourclients’ income, borrowing and spending, which will yield insights
into how our products and services impact clients’ ability to manage
their money. These feedback loops will be essential for building
empathy and testing our hypotheses as we pilot new services andseek to learn what our clients find most useful.
Seeking to understand our clients’ lives is one of the most importantways we live out our values to Stand by Our Clients, Listen First,
Learn-Think-Share, and Be Genuine. We believe it is vital for our
pursuit of a more equal world-- a world where everyone is able todetermine their own destiny.
Gojo Impact Report 2019 | 41

Contributors
Gojo group: Cheriel Neo / Koh Terai / Praachi Gandhi / Taejun Shin /Stuart Rutherford / Takao Takahashi / Yung Han Chang / Tomohiro
Isozaki / Arisa Oba / Sayuri Aoyama / Yoshinari Noguchi / Sok Kosal/ Sengdy Khiev / Annie Mookerji / Kusum KC / Daw Thazin Khaing /Nagendra Rajawat
JICA: Mikio Hataeda / Kazuko FunakoshiContact:
Cheriel Neo
cheriel.neo@gojo.co
Please reach out if you have feedback on this report or
would like to collaborate with us on impact measurement or SPM.
Gojo & Company, Inc. is headquartered in Japan, at
3-14-5 Sendagaya, Shibuya, Tokyo 151-0051
www.gojo.co© Images: Gojo & Company Inc / Microfinance Delta International/ Sejaya Microcredit / Satya Microcapital / Ananya Finance for
Inclusive Growth© Gojo & Company, Inc, 2020. All rights reserved.

42 | Gojo Impact Report 2019

Gojo Impact Report 2019 | 43